Quarts of orange juice at a local grocery store are priced at one for $3.00, or two for $5.00 . The marginal cost of buying a second quart of orange juice:
a. equals $2.00.
b. equals $2.50.
c. equals $3.00.
d. equals $5.00.
a
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Inflation might lead to ________ because ________
A) lower demand for stocks; of tax distortions B) lower demand for cash; money does not typically yield interest C) uncertain or uneven demand for goods; higher fluctuations in relative prices make it harder for consumers to compare among goods and make rational consumption decisions D) all of the above E) none of the above
The marginal rate of technical substitution shows
A) how many machines can be replaced by computers, keeping output constant. B) how many computers are needed to replace workers so that output can increase. C) the rate at which technology advances change marginal productivity. D) how many workers can do the job of one computer, keeping output constant.
If the marginal physical product of more labor is twice as high as the marginal physical product of more machinery, a profit-maximizing firm will
a. reduce the labor used and increase the machinery used if labor costs half as much as machinery. b. reduce the labor used and increase the machinery used if labor and machinery cost the same amount. c. reduce the labor used and increase the machinery used only if labor costs more than twice as much as machinery. d. reduce the labor used and increase the machinery used only if labor costs exactly twice as much as machinery.
Straker Industries estimated its short-run costs using a U-shaped average variable cost function of the formAVC = a + bQ + cQ2and obtained the following results. Total fixed cost (TFC) at Straker Industries is $1,000. 
If Straker Industries produces 20 units of output, what is estimated average total cost (ATC)?
A. $67.40 B. $117.40 C. $19.40 D. $1,348